MID – CAP THEMATIC PICKS

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 SANOFI INDIA LTD.

Investment Rationale Institutional Investors

Profile
1.49% 1.44%
Sanofi, one of the world's leading healthcare companies, and its
100% subsidiary - Hoechst GmbH, are the major shareholders of L&T EMERGING BUSINESSES FUND

Sanofi India Limited and together hold 60.4% of its paid-up share NIPPON INDIA SMALL CAP FUND
capital. 1.69%

SBI MAGNUM MIDCAP FUND

Industry Leading Growth 3.24%
SIL continues to own a stronger chronic portfolio in domestic MNC UTI-MNC FUND

pace. Revenue growth excluding export for the domestic business ADITYA BIRLA SUN LIFE PHARMA
continues to be at mid-high single digits. 1.92% & HEALTHCARE FUND
ABERDEEN GLOBAL INDIAN
As per IQVIA (IMS) Jun’20 TTM data, SIL grew at 10.6% YoY EQUITY LIMITED
2.13%
compared to the domestic pharma industry growth of 7.5%. Lantus
reflect strong growth of 20.6%, Combiflam at 16.4%, Allegra at % of Total Shareholding
14.4% and Amryl at 12.4% at MAT level. However, all other leading
brands are in single mid-digits. Financial Summary

New Launches
Particulars
Future launches from its global staple along with brand extensions (₹ cr)
CY 21 E CY 20 E CY19 CY18 CY17 CY16
and access to innovative molecules from global parent like the
recently launched anti-diabetic Toujeo will drive growth going Revenue
ahead. from 3,178.2 3,017.3 3,070.6 2,770.8 2,463.6 2,366.8
Operations
Balance sheet comfort along with strong brand growth and EBITDA 769.1 701.6 665.3 622.9 519.2 417
corporate governance make this a safe long term investment bet.
EBIT
24% 23% 22% 22% 21% 18%
Margin

EPS 245.33 221.79 180.09 165.48 141.74 132.26

Source – Company filings, Bloomberg

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 BHARAT ELECTRONICS LTD.

Investment Rationale Institutional Investors

LIFE INSURANCE
Profile CORPORATION OF INDIA
3.32%
BEL produces a wide range of state-of-the-art equipment in fields 5.61% SBI EQUITY HYBRID FUND
such as Defence Communication, Radars, Naval Systems, C4I
Systems, Weapon Systems, Homeland Security, Telecom &
2.32% ADITYA BIRLA SUN LIFE
Broadcast Systems, Electronic Warfare, Tank Electronics, Electro
EQUITY FUND
Optics, Professional Electronic Components and Solar Photovoltaic
Systems, BEL also provides turnkey system solutions. 1.25% MIRAE ASSET LARGE CAP
FUND
Civilian products from BEL include Electronic Voting Machines, KOTAK STANDARD MULTICAP
4.85%
Tablet PC, solar-powered traffic signal systems and Access Control 3.30% FUND
Systems. CPSE EXCHANGE TRADED
3.38% SCHEME (CPSE ETF)
Strong Order Inflow
Order inflows were robust, up 72% YoY to INR34.2b. Major orders % of Total Shareholding
received during the quarter (ended June) were for Ventilators,
Advanced Torpedo Defense systems and Smart City projects. Financial Summary

Major orders expected in FY21 are for Electronic Warfare systems,

Particulars
Avionics package for LCA, Naval Fire Control systems, and Radar (₹ cr)
FY 22 E FY 21 E FY20 FY19 FY18 FY17
systems.
Revenue
Sectoral tailwinds from 14,702.9 13,115.1 12,967.67 12,164.17 10,400.8 8,668.34
Rising defence expenditure and import substitution in the defence Operations
space augurs extremely well for BEL, as it has a strong established EBITDA 2,967.3 2,633.2 2,527.24 2,767.63 1,782.89 1,713.33
relation with the government and extensive R&D capabilities. The
robust order inflows also provide revenue visibility in the medium EBIT
20% 20% 19% 23% 17% 20%
Margin
term.
EPS 7.84 7.17 7.49 7.74 5.88 6.2

Source – Company filings, Bloomberg

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 PI INDUSTRIES LTD.

Investment Rationale Institutional Investors

Profile 1.2%
Founded in 1946, PI Industries Ltd. (“PIL”) works with a unique 0.2% HDFC LIFE INSURANCE COMPANY
LIMITED
business model across the Agchem value chain from R&D to 4.4% 1.4% IEPF
distribution providing innovative solutions. PIL has built leading
AXIS MUTUAL FUND
brands over the last 72 years and connected with more than
84,000 retail points pan India. SBI LARGE & MIDCAP FUND

UTI-UNIT LINKED INSURANCE

Strong performance 3.3% PLAN
TATA LARGE AND MID-CAP FUND
CSM revenue grew strongly by 22.6% yoy to Rs 6.1bn despite
revenue of about Rs1-Rs1.5bn impacted due to lockdown, in the 1.5% KOTAK EQUITY HYBRID
quarter ended June 2020. ICICI PRUDENTIAL BALANCED
1.3% ADVANTAGE FUND
2.0%
Management indicated that Rs20bn of funds raised via QIP would
be deployed over the next 5-6 quarters where the company is % of Total Shareholding
looking at multiple opportunities across the chemical space but
focus would be largely on creating material pharma capabilities. Financial Summary
The company would also look at diversifying their production
facilities outside India to reduce their concentration risk.
Particulars
FY 22 E FY 21 E FY20 FY19 FY18 FY17
(₹ cr)
Positive Guidance and Initiatives
Drastic cost cutting initiatives, along with capacity expansion Revenue
given healthy demand for pharma intermediary chemicals could from 5,257.2 4,297.8 3,366.5 2,840.9 2,277.1 2,276.83
improve the performance going forward. Management maintains Operations
their revenue growth guidance of over 20-25%+. EBITDA 1,195.5 949.1 719.8 569.6 495.5 554.82

EBIT
22% 22% 21% 20% 22% 24%
Margin

EPS 55.39 43.06 33.09 29.72 26.64 33.39

Source – Company filings, Bloomberg

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 MPHASIS LTD.

Investment Rationale Institutional Investors

Profile 1.63% 1.75%
Mphasis is engaged in a global, multicultural organisation ICICI PRUDENTIAL LIFE
headquartered in Bengaluru, India, specialises in providing a suite INSURANCE
1.06%
of application development and maintenance services, HDFC LIFE INSURANCE
1.86%
infrastructure outsourcing services and business & knowledge
process outsourcing solutions to clients around the world. 1.16% LIC

It serves marquee customers across the globe including six top UTI
global banks, eleven out of fifteen top mortgage lenders, and 1.96%
three top global insurance companies and has about 22,000 2.12% SD APG EMERGING
employees across sixteen countries. Mphasis applies advancements MARKETS EQUITY
in cognitive and cloud to traditional application and infrastructure 2.44%
services to bring much needed efficiency and cost effectiveness.
% of Total Shareholding
Strong client additions
The company has seen robust deal wins in the quarter with 66% Financial Summary
YoY growth in new deal total contract value (TCV) to 259 million
U.S. dollars. In addition, it has also signed 216 million U.S. dollar
Particulars
deal in July 2020 which will be reflected in Q2 FY21E. Further, the (₹ cr)
FY 22 E FY 21 E FY20 FY19 FY18 FY17
company has also seen healthy client addition of one client in 75
million U.S. dollar and three in 1 million U.S. dollar bucket. In add Revenue
from 10,499.6 9,476.4 8,843.54 7.819.37 6,545.84 6,076.36
Further, healthy balance sheet could help the company in Operations
inorganic revenue growth opportunities.
EBITDA 1,970.4 1,753.9 1,650.38 1,323.83 1,059.06 967.63

EBIT
19% 18% 19% 17% 16% 16%
Margin

EPS 71.83 63.07 63.52 57.64 43.34 37.62

Source – Company filings, Bloomberg

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 ALEMBIC PHARMACEUTICALS LTD.

Investment Rationale Institutional Investors

Profile 0.6%
Established in 1907 with an objective to develop and revolutionize 1.0%
the Pharmaceutical and Drug industry in the Indian subcontinent, Elara India Opportunities
Alembic Pharmaceuticals Limited today is one of the leading Fund Limited
pharmaceutical companies in India. HDFC Life Insurance
Company Limited
As a growth strategy, the company has aggressively started DSP Midcap Fund
investing in the international generics market with successful
ANDA and DMF filings. APL has also filings across Canada, Europe, 2.2% IEPF
1.4%
Australia, South Africa & Brazil. The company caters to the rest of
the world markets through branded formulation sales.

Product Pipeline
Company filed 8 ANDAs during the quarter and received approvals % of Total Shareholding
for 4 ANDAs. Cumulatively, company now has 191 ANDA filings,
with 125 approvals & 79 products launched so far. Company Financial Summary
launched 3 products in the US in 1QFY21, will launch 5 products in
2QFY21. For full year FY21, company plans to launch 15-20 new
Particulars
products. (₹ cr)
FY 22 E FY 21 E FY20 FY19 FY18 FY17

Growth Investments Revenue

Around 80% of the products are fully backwardly integrated, and from 5,822.3 5,252.6 4,605.76 3,934.69 3,130.18 3,134.61
the company plans to invest Rs. 6-7 bn in injectables over the Operations
coming periods. Strong API growth momentum and healthy product EBITDA 1,401.5 1,345.3 1,214.07 855.82 615.26 614.71
pipeline provide adequate revenue visibility in the medium term.
EBIT
25% 26% 26% 22% 20% 20%
Margin

EPS 45.02 44.47 43.97 31 21.89 21.39

Source – Company filings, Bloomberg

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